New E-Commerce Study

The Strategis Group’s newest publication, Electronic Commerce  Internet Payment Systems, explores primary Internet commerce initiatives, including digital cash, electronic checking, and credit card transaction systems.  The 183-page report also discusses general Internet usage and examines consumer purchasing habits with regard to online content and hard goods.  A special appendix to the study examines the impact of increasing Internet penetration of American households on future market opportunities for consumer Internet commerce.

Specific topics discussed include

* Issues affecting Internet payment systems such as regulation and security.

* Specific payment systems, namely online electronic payment specialists, dual purpose platforms, and electronic transaction facilitators.

* Consumer Internet commerce usage.

In addition, the following companies are profiled

CertCo LLC






Digital Equipment Corp.


First Virtual



Gold & Silver Reserve

Hewlett Packard




Open Market




Wave Systems

Based on primary and secondary industry research as well as a nationally representative survey sample of 1,000 households, Electronic Commerce Internet Payment Systems provides valuable information about the emerging world of Internet commerce.  The report is available in CD-ROM format for convenient use at corporate sites and in hard copy format for single users.

The Strategis Group — with offices in Washington, D.C., London, and Singapore — publishes in-depth market research reports and provides customized consulting services and continuous information solutions to the multichannel video, satellite, Internet, competitive telephony, and wireless communications industries.  The Strategis Group’s market studies, valuations, and strategic planning projects provide crucial information to communications industry leaders throughout the world.  For more information or an electronic sample of data contained in Electronic Commerce  Internet Payment Systems please contact Matt Page at 202-530-7516 (phone), 202-530-7540 (fax), visit [][1] or

[1]: http://


Drexler to Demo Card Workstation

Drexler Technology Corporation announced it is delivering six multi-card workstations that can read/write a variety of data cards, including smart cards, optical memory cards, magnetic-stripe cards, and multi-technology cards. The multi-card workstation was developed by the Company under an $800,000 contract from an undisclosed customer. Drexler Technology has the right to manufacture and market the workstation.

The multi-card workstation, which functions with a standard personal computer, will be demonstrated at the CeBIT ’98 exhibition in Hannover, Germany, March 19-25, 1998 and in Washington D.C., April 27-30, 1998, at the CardTech/SecurTech ’98 Conference.

Drexler’s LaserCard(R) optical memory cards used with the workstation contain an optical memory stripe that is capable of storing over 1 megabyte of user data. The card workstation also can read conventional magnetic-stripe cards, OCR-B symbology, 2-dimensional bar codes, and smart cards having a microcontroller chip that contains a microprocessor and semiconductor memory.

The multi-card workstation also is capable of writing and reading data to and from a single “Smart/Optical(TM) card” — a card containing both a microcontroller/microprocessor chip and an optical memory stripe. In general, the Smart/Optical(TM) card, like a tiny PC, could be used for a wide variety of applications by utilizing its microprocessor for transaction processing and its optical memory for data storage. By combining two or three technologies, a single card could house multiple applications such as Internet electronic commerce, medical insurance, financial transactions, medical/health records, identification, admission tickets, and airline- and travel-benefits programs.

Based in Mountain View, Drexler Technology Corporation manufactures LaserCard(R) optical memory cards that store 1 to 4 megabytes of data. The Company’s wholly owned subsidiary, LaserCard Systems Corporation, develops system software for PC-based optical memory card systems. LaserCard(R) applications include immigration cards, cargo manifests, access control cards, healthcare records, high security/interactive ID cards, automotive records, medical image storage, portable records with audit trails, and consumer transaction systems.

Forward-Looking Statements Certain statements made above relating to plans, objectives, and economic performance go beyond historical information and may provide an indication of future results. To that extent, they are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and each is subject to factors that could cause actual results to differ from those in the forward-looking statement. Such factors are described in the Company’s Report on Form 10-K and other documents filed by the Company from time to time with the Securities and Exchange Commission.

For Drexler Technology news on the Internet .


Sub-Prime Explosion

As a U.S. Senate Committee probed the alleged lending abuses of so-called sub-prime mortgage firms this week and as sub-prime auto loan concerns have faltered over the past few months, the market for sub-prime bank credit cards is red hot. Last year the number of sub-prime cards issued soared by 50% compared to the 9% overall growth rate in cards issued. Sub-prime cards, which includes both secured and unsecured credit cards issued to consumers with below average credit scores, topped 14 million at the end of 1997. Over the past twenty-four months the sub-prime segment has grown a staggering 141%. Among the fastest growing players are Sioux Falls, SD-based First Premier Bank and Colorado- based Best Bank. First Premier’s portfolio has skyrocketed from 40,000 cards to well over 200,000. Among major players, Direct Merchants or Metris Companies leads the pack, tripling its portfolio since the end of 1995. Top issuers Capital One, Bank of America, Wells Fargo and Associates have also realized significant gains in their sub-prime segments. Based on data collected by CardTrak/CardData the total number of sub-prime cards-in-force at year-end 97 totalled 14.2 million compared to 9.5 million for 96 and 5.9 million for year-end 95.

                                FASTEST GROWING SUB-PRIME ISSUERS
                                     TOTAL CARDS-IN-FORCE
                             1997           1996           1995          2YR
Providian                    6.1m           4.7m           3.3m          +85%
Direct Merchants             3.7m           2.2m           1.2m          +208%
First Consumers              564k           385k           336k          +68%
First Natl Marin             463k           333k           180k          +157%
First Premier                235k           109k           40k           +488%
Orchard Bank                 221k           156k           119k          +86%
Cross Country Bank*          1.2m           500k           300k          +300% 
Best Bank*                   434k           200k           100k          +334%
       * estimated or preliminary data m-millions  k-thousands
       SOURCE CardData-CardTrak


Cap One Names OPs Head

Capital One today announced the promotion of Marge Connelly to Senior Vice President, Credit Card Operations.  Ms. Connelly will lead the Production Services and Customer Relations organizations — with responsibility for the management of Capital One’s call centers, including customer relations and retention, along with cardholder correspondence processing, chargebacks and retrievals, credit operations, payment processing, embossing, image operations and statement rendition.

“Capital One is thrilled to recognize Marge Connelly for her commitment to the company and its associates.  She has had a profound influence on our business,” Nigel Morris, Capital One’s President and Chief Operating Officer, stated.  “She is an asset to our organization as evidenced by the way she has built a solid infrastructure that services Capital One’s over 11 million customers in the U.S. and abroad.”

Ms. Connelly has made a number of contributions to Capital One since joining in 1994, most significantly, aligning Capital One’s operational areas with its business strategy to reduce expenses and improve efficiency and effectiveness.  She also ensured a smooth transition in operations when the company spun off from Signet, and was instrumental in establishing the infrastructure needed to serve Capital One’s rapidly expanding customer.  Most recently, Ms. Connelly has helped Capital One leverage its operational strengths to generate revenue in areas like customer retention and customer service marketing.

Currently a member of the Board of Directors for the Metro Richmond Chamber of Commerce, Ms. Connelly is a member of Visa’s Operations Advisors Committee and has also been involved with a number of community activities, including the Capital One Kids Cafe and Habitat for Humanity.  Other special interests include mountain biking and hiking.

Headquartered in Falls Church, Va., Capital One Financial Corporation (NYSE COF) is a financial services company whose principal subsidiaries, Capital One Bank, and Capital One, F.S.B., offer consumer lending products. Capital One’s subsidiaries collectively had 11.7 million customers and $14.2 billion in managed loans outstanding as of December 31, 1997, and are among the largest providers of MasterCard and Visa credit cards in the world. Capital One’s Internet address is .


Cyberflex Training Class

Schlumberger announced Tuesday  that its next Cyberflex Training Class will be conducted in Austin on April 7-9, 1998. The course is directed at software developers, teaching them to use Cyberflex(tm), the smart card with a Java(tm) Virtual Machine. The curriculum will provide developers with the tools and knowledge about Java card programming that they will need in the exciting new world of smart cards opened up by Cyberflex.

On the first day, Java basics will be reviewed, and the next two days will concentrate on learning the features and programming techniques for the Cyberflex card. Students will be taught to design and create a moderately complex Cyberflex application, including object instantiations, exception handling, class inheritance, and Cardlet(tm) loading with a secure framework. Students coming to the class should have a basic knowledge of C or C++ and basic knowledge of microprocessor hardware for chip cards.

A detailed course description and registration information can be found on the Schlumberger Cyberflex web site at .

“Cyberflex has opened smart card programming to the world of mainstream computer software development. This brings tremendous opportunities to software companies and programmers that have new, innovative ideas for smart card applications,” said Tom Lebsack, information security and multimedia business segment director for Schlumberger Smart Cards. “Developers who want to be involved in this new field should definitely take advantage of this course.”

Schlumberger is a leader in Java card technology, developing and introducing the first Java-based smart card, Cyberflex, in 1997. Since then, Java card technology has revolutionized the industry, with major smart card manufacturers, chip manufacturers and card issuers endorsing and supporting Java card technology, especially for secure multiple application smart cards. The development of the Cyberflex card mirrors the Schlumberger commitment to drive smart cards to open standards and broaden their reach. Among these are the company’s participation in the PC/SC Workgroup to define the specifications for smart cards in the PC environment and the company’s leadership participation in the industry’s Java Card Forum.

About Schlumberger

Schlumberger Electronic Transactions offers a flexible portfolio of smart card-based solutions for businesses and communities of all kinds. The company provides cards, terminals, development tools and support in open configurations for operators, developers, integrators and distributors worldwide. Under The Smart Village(R) brand, the Schlumberger offer includes the milestone Cyberflex card, the industry’s first Java-based smart card. The Electronic Transactions group employs over 5,000 people and operates 45 facilities in 34 countries across the globe. Additional information is available on the World Wide Web at .

Schlumberger Electronic Transactions is a business segment of Schlumberger Limited, a $10.65 billion global technology service company providing oilfield services, natural resource management, transactions based technology and associated systems, and semiconductor test equipment.

Cyberflex and Cardlet are trademarks of Schlumberger. Java is a trademark of Sun Microsystems, Inc.


Latin America’s First RemoteTeller

Banco Credito e Inversiones has installed Latin America’s first RemoteTeller System.  The system, located on the ground floor of the new Chilean Telephone Company main office building, was installed to help bring new types of financial services to Chile.

The RemoteTeller System, developed by Diebold, Incorporated (NYSE DBD), has four interactive banking stations with video conference hook-ups and a pneumatic document delivery system.  It is comparable to the type of environment customers would experience at a drive-up bank window.

A customer who approaches one of the four banking stations is greeted via two-way closed circuit television technology by a teller located elsewhere in the building.  The RemoteTeller System accommodates all transactions performed in a traditional bank lobby with paperwork and currency sent back and forth by the pneumatic tube system.  While transactions are being processed, a color customer monitor can display current news, sports and weather information, along with promotional messages.

“The RemoteTeller System is more efficient than a traditional bank lobby since our tellers can now service more than one customer at a time,” said Andres Bianchi, head of self service banking support at Banco Credito e Inversiones.  “Customers appreciate a system that combines the convenience of today’s technology, but still offers the personal experience of both seeing and talking with a teller.”

Floor space that would have been used for lobby teller stations can be devoted to other banking sales efforts.  Since tellers can be located in a secure environment, financial institutions can extend their hours while ensuring employee safety.

“The RemoteTeller System is a solution that integrates new and existing technology,” said Ernesto R. Unanue, Diebold vice president and managing director, Latin America.  “It can be custom-designed to meet the specific needs of our customers and easily upgraded as technology advances and customer requirements change.”

Diebold currently has multiple RemoteTeller Systems installed.  The RemoteTeller System was sold and installed by TecnoDisk, Diebold’s exclusive distributor in Chile.  TecnoDisk, with offices in San Jose, Calif. and Santiago, Chile, specializes in security equipment and currency handling systems and is a leader in selling and installing Diebold’s self-service banking solutions in Chile.

Banco Credito e Inversiones is one of Chile’s largest banks with over 140 branches throughout the country and provides a wide range of financial services.  The bank has traditionally been acclaimed as the leader in technological innovation in the Chilean banking industry.

Diebold, Incorporated (pronounced DEE-bold), headquartered in Canton, Ohio, is a global leader in providing card-based transaction systems, security and service solutions to the financial, education and healthcare industries. Founded in 1859, the company develops, manufactures, sells and services automated teller machines, electronic and physical security equipment, automated medication dispensing systems, software, supplies and integrated systems solutions.


ASE Partner Program

Aladdin Knowledge Systems Ltd. announced yesterday the official launch of the Partner’s Program for ASE — The Aladdin Smartcard Environment. Aladdin has introduced the ASE Partner Program to stimulate and develop PC-based smart card technology.

“The essence of the ASE Partner Program is the creation of a network of companies focused on the development and promotion of smart card products. The program will establish and maintain a base of smart card business partners who will be able to gain from each other’s experiences and business connections,” says ASE Partner Program Manager Micki Segal. “Aladdin is committed to putting its wealth of experience, imagination and market influence behind its partners.”

The ASE Partner Program encompasses several types of Partnerships ranging from Smart card, PC, Hardware and Electronic Equipment Manufacturers to VARS, Resellers, Consultants and Software Developers/System Integrators.

“Our ASE Partners will be able to gain unique marketing and technical advantages through a network of shared information, expanding their customer base across the globe and increasing business opportunities through contact with other ASE Partners,” says Aladdin’s Director of Smart Cards, Eyal Manger.

ASE has been invaluable for designers of virtually all kinds of smart card applications and Internet-based commerce. Successful applications developed and deployed by ASE products include access control, prepayment vending systems, authentication, digital signature, health care, electronic purse, biometric recognition systems and software distribution.

Further details of such applications can be seen on Aladdin’s Web site — [][1]. To become an ASE Partner please contact Aladdin at

About Aladdin

Aladdin Knowledge Systems is a global leader in the secure licensing and distribution of digital content. Aladdin’s product range includes HASP(R) and Hardlock(R), key-based software security systems which monitor software licensing and prevent unauthorized use of computer programs; Privilege(TM), a suite of software licensing and metering tools for developers and corporate IT managers; and ASE(R) – The Aladdin Smartcard Environment – a set of smart card application development tools for integrating smart cards with PCs. Aladdin is an ISO 9002 accredited company with headquarters in Tel Aviv, Israel, and 5 international offices and distributors in more than 40 countries, serving over 25,000 clients worldwide. For more information, visit the Aladdin home page at .



ExpenseLink 2.2

Gelco Information Network, leading U.S. supplier of best-practice outsourced solutions for travel expense and trade promotion management, announced Wednesday the April 1998 availability of an enhanced version of ExpenseLink, its PC-based travel expense management solution.

With ExpenseLink 2.2, Gelco extends corporate card management to the traveler level by providing them with daily downloads of transaction information and account maintenance updates. All the information appears in an on-screen worksheet on the traveler’s PC for quick, easy, and accurate expense reporting and account management.

Gelco has provided corporate card management through direct, pre-scheduled corporate card payments since 1992, empowering customers to time payments for optimum cash flow while minimizing the risk of delinquencies. “Since we first started paying corporate cards in 1992, we’ve paid tens of billions of dollars in corporate card payments — and managed more than 500 million corporate card transactions,” said Bob Karrick, Gelco president and CEO. ExpenseLink also offers travelers an on-screen corporate card reconciliation feature.

These corporate card management tools are part of Gelco’s complete travel expense management solution, an outsourced service that relieves companies of the cost and administrative burdens of travel expense management, while providing 100% of their travelers with easy expense reporting and fast, direct reimbursement into their bank accounts.

“This is the next step in total corporate card management,” said Ken Davison, VP of product and marketing at Gelco. “For several years our outsourced processing services have helped companies reap the benefits of corporate charge cards. Our pre-scheduled, direct corporate card payments bring our customers cash flow benefits and reduced delinquency rates, while freeing their travelers of worries about tapped-out corporate cards. And now, because we process corporate card transactions in such volume, we can get and provide daily access to charge information — so travelers can account for every charge and build expense reports faster and easier.”

In addition to the corporate card management enhancement, ExpenseLink 2.2 will also include several other new features, developed in response to customer demand.

— Automated LAN/WAN installation – LAN/WAN users will be able to bypass time-consuming set-up programs. ExpenseLink 2.2 will offer users the convenience of “silent installation” directly off their company’s LAN/WAN. “We installed our last 100 companies in an average of 49 days,” said Leo Smith, VP of client services for Gelco. “We think that this enhancement will let us get even faster.”

— Expanded cost control capabilities – Managers using the 2.2 Approver Module will be able to view every expense report detail, including project and cost center codes and out-of-policy explanations. Armed with this additional data, managers will have the information they need to move quickly through the approval process.

— Self-paced training tutorial – All new in the Approver Module, enhanced in the Employee Module, ExpenseLink 2.2 will include a progressive tutorial for a faster, easier training process.

About Gelco’s Travel Expense Management Solution

Through its Expense Network, Gelco offers complete outsourced travel expense management solutions that relieve companies of the costly, time-consuming tasks of collecting employee travel expense information, reimbursing employees, paying corporate cards, reconciling their spending against company policies, and entering travel expense data into the general ledger. In addition, Gelco Expense Network enables companies to re-engineer their travel expense processes for 100% of their business travelers quickly and without risk (Gelco offers a touch-tone phone based solution for travelers without PCs).

Outsourcing expense management to Gelco can cut the total cost of processing expense reports by more than 75%. Unlike third-party software, Gelco’s outsourced solutions enable companies to consolidate multiple expense reporting systems, or quickly implement a new program, without heavy demands on MIS — a resource often absorbed by mission-critical projects.

Gelco Expense Network speeds and simplifies expense management by providing employees a strong incentive to complete and file their expense reports reimbursement within three business days of reporting expenses (other reimbursement systems average about 15 days). Gelco pays any and all corporate charge cards on time, eliminating late charges. Automated general ledger updates, from verified Automated Clearing House transactions, are then available for electronic transfer and posting to virtually any accounting software package.

Using best practices control methodologies, Gelco automatically compares every line item to company policies, pays acceptable business expenses, and flags irregular or excessive requests for special attention. By automatically paying standard expenses and focusing managerial attention on exceptions, the system streamlines the expense process, improves control, and gives finance managers a current assessment of liabilities.

Gelco Information Network

Gelco Information Network, Eden Prairie, Minn., is the industry-leading supplier of cost-effective, best-practice based outsourced travel expense and trade promotion management solutions to more than 2000 U.S. and multinational companies and to more than 80 government agencies. In 1997 alone, Gelco processed over 4 million commercial expense reports and managed more than $30 billion in trade promotion funds. For more information on Gelco’s travel expense management solutions, call 1-800-444-6588 ext. No. 400, or visit Gelco’s Web site at [][1].



India’s First Maestro Transaction

MasterCard International and Citibank announced the next step in the evolution of electronic deposit access in India with the country’s first national and international Maestro transactions. Mr. John Reed, Chairman and Chief Executive Officer, Citicorp was present in Bangalore to witness the first local Maestro transaction made by the cricket world’s most renowned all rounder, Mr. Kapil Dev.

Subsequently, Mr. Andre Sekulic, Deputy President, MasterCard International, Asia/Pacific conducted the first international Maestro transaction in India by using his Maestro card issued in Australia to purchase an Arrow shirt from the well known store ‘Favorite Shop’ equipped with a Citibank Maestro terminal. This event marked the first time a Maestro card from another country was used in India.

“Consumers in Asia/Pacific have been quicker to embrace new payment methods than any other region in the world and we have seen that evidenced in the success of Maestro,” Mr. Andre Sekulic said. “We are proud that Maestro has once again broken new ground, in this case to provide consumers in India and around the world with the future of money today – safe, secure electronic access to their own money.”

“Citibank has pioneered yet another step in the evolution of electronic payments in India,” said Mr. Ashoke Dutt, Head of Global Consumer Banking for Citibank in India.

“In partnership with MasterCard, we have opened up India as the next destination where consumers from around the world can use their Maestro cards to access their own funds while traveling abroad. We have made a major investment deploying 1,000 terminals in Bangalore and plan to roll this program out to other Indian cities later this year.”

In September of last year, Citibank became the first financial institution in India to participate in Maestro, the world’s largest on-line debit program from MasterCard International.

This step provided Citibank customers the unique advantage of being able to access their bank accounts directly from merchant establishments and pay for a wide range of goods with their ATM cards.

Mr. J. Sannon, Senior Vice President and General

Manager, South Asia, MasterCard International said,

“We are delighted to be working with Citibank to enhance the utility of Maestro in India. Not only will Citibank’s investment in this program generate valuable foreign exchange for India, but it also provides an acceptance platform for other Indian banks when they commence issuing Maestro later this year.”

These events in India today register a significant milestone in the development of Maestro and its market leadership. Maestro, launched globally less than five years age, has been taken up by more than 140 million consumers around the world, 36 million of those in Asia/Pacific. In Asia/Pacific, MasterCard anticipates that by the year 2000, Maestro enhanced debit cards will be in the hands of 100 million consumers across the region.

About Citibank

Citibank opened its first office in Calcutta in 1902, and subsequently expanded its network to Mumbai, New Delhi, Chennai Bangalore, and Pune. Over the decades, Citibank has emerged as the leading International bank in India with a track record of outstanding business milestones.


Equifax Wireless Fraud Exchange

Equifax Inc. announced it is developing and maintaining a data exchange that automatically alerts customers in the wireless industry to a potential fraud situation.  The Equifax Wireless Fraud Data Exchange is designed to improve risk assessment for the wireless industry.

Exchange members continually contribute information on their suspect fraud cases to this database.  When a consumer application is processed via Equifax’s proprietary MultiVision(sm) platform, the fraud data exchange automatically checks the database for a match.  A flag is returned when a match is found.

Val Perry, senior vice president and general manager, Equifax Telecommunications & Utilities Solutions, said, “Wireless industry leaders told Equifax they needed a tool to indicate potentially fraudulent situations without overtaxing the user with additional keystrokes or an abundance of ‘false’ flags.  Working together, we have come up with a solution Equifax’s Wireless Fraud Data Exchange.

“Our experience in developing and running the National Telecommunications Data Exchange (NTDE), the National Consumer Telecommunications Data Exchange Inc. (NCTDE, Inc.) and Exchange(sm) 2000 makes this a perfect fit,” Perry added.

Combating subscription fraud while at the same time keeping acquisition costs low requires a delicate balance.  Equifax’s Fraud Data Exchange reduces exposure to write-offs and operational costs by indicating when an application may require further investigation.

The Equifax Wireless Fraud Data Exchange will be available to the wireless industry in the second quarter of 1998.  For more information, please contact Natt Davis at 404-885-8074.

All of the Equifax Telecommunications & Utilities Solutions’ products can be accessed via MultiVision, including

*POSITIVE ID(sm) — Identification verification.

*D.L Advantage(sm) — Identification verification through driver’s license information.

*Safescan(R) — Fraud alert.

*Wireless Risk Assessment Model(sm) — Credit score designed specifically for the wireless industry.

*Exchange(sm) — Payment history with other telecommunications vendors and skip tracing information.

Equifax’s worldwide knowledge-based information, transaction processing, consulting and software businesses are designed to bring buyers and sellers together, thus changing the shape of global commerce.  Equifax serves the banking, financial, retail, credit card, telecommunications/utilities, automotive, government and health care industries.  It is a leading supplier of business information solutions in Canada, the UK and Latin America. Equifax operates in 17 countries with sales in more than 40 countries. Founded in 1899 in Atlanta, Equifax today has 10,000 employees around the world.  Revenues for the 12 months ended December 31, 1997, were $1.4 billion.  On the Internet, Equifax Telecommunications and Utilities Solutions is .


Fee Spiral

Late fees and over-limit fees continued their upward trend in February as major issuers are now charging nearly $20, on average, for late payments.

                    LATE FEES           OVER-LIMIT FEES
     Mar 97        $15.01              $14.72
     Sep 97        $18.82              $17.51
     Dec 97        $19.24              $18.44
     Mar 98        $19.33              $18.53
          Source Bankcard Barometer, March 1998